Today we’re discussing the other “i” word–illustration. We are diving into how illustrations are manipulated to sell the sizzle and not so much about focusing on the substance.
It seems that far too many of the people working in the marketing department feel that they need to really “push the envelope” in terms of illustrating projected product performance. In other words, they like to distort reality to make their products seem a bit more attractive than they would otherwise be.
This is particularly true when it comes to variable and indexed products as it is somewhat easier to inflate things based on using unrealistic returns on the investment sub-accounts and/or indexed accounts.
We have seen illustrations that used static returns of 8-12% depending on the product and when we saw them as the “standards” of what is allowed have changed over the last few years.
There really is no academic argument as to why anything should be illustrated at rates this high, however, someone in marketing decided that it makes their product look really nice when shown these sorts of rates and that will convince people to buy.
What’s more… Read More…